Digital Journeys II: Next Generation Retail Analytics

| 16 Jul, 2014

Andris Berzins, Chief Commercial Officer at Walkbase, introduces a next generation retail analytics solution, which leverages the smartphone revolution to provide retailers and brands with real-time foot traffic trend information.

Next Generation Retail Analytics - Andris Berzins, Walkbase - Digital Journeys 2013

Hello, everyone. My name's Andris. I'd like to thank the Jellyfish team for inviting us here. We're very honoured to be asked to present. It's a great introduction from Matt as well, because the word footprint was stated very many times during the last presentation, and what we're going to talk about is real footprints. Looking at how foot traffic can be looked at in a different way now, as technology has evolved.

A little bit of background on me. So I'm Chief Commercial Officer at Walkbase, I have about 15 years background in tech and start ups. What's really changed is what we talked about yesterday at a Google event about mobile. The fact that the smartphone revolution has happened, with so many people walking around with phones, has really changed the opportunities we have to think about how we understand the behaviour of consumers. Let me see if I can get this moving. What's happened on the marketing side is we've become data junkies. And Google is to blame for a lot of this, because they've given us so much data to use, to work with. Unlike when I went to business school 15 years ago, I just went to my reunion. Back then we were studying marketing plans, and thinking about strategy and so forth. It was all offline, it was all thinking about a lot of stuff that was very qualitative, and not so measurable. The world that most of you live in now has tons of data, and you're doing tons of measuring, and you're probably hiring data scientists and analysts, and all that stuff. That's really changed now in really the last 15 or 20 years.

The thing is that if you think about retail and the sales world, 92% of sales is still offline. It's only a few categories that have really moved online in a big way, and there's still a vast amount of consumer spending that happens offline. And actually most of those decisions are made in the store. So, the world has changed tremendously, and we're focused on measuring very detailed stuff regarding actually what's still a small proportion of the total amount of retail activity that goes on in the way consumers spend.

As I said, in some categories, it's really been dramatic. So, books, music, were really the first to go. Amazon really killed those, and we've seen a lot of store closures and a real change in behaviour, Spotify being the next generation, right, in terms of the change in how we consume music. That's definitely been accelerating there, but what's really happened with the advent of mobile is that the other 92% of retail is starting to feel a lot of changes.

This is a recent study that Google released, the Google Marketing Agency Council looking at how smartphone users behave in stores. And 84% of them, every month, use phones to help shop in stores. And the number one thing they do of course, as everyone knows, is they check prices. So you go and look at this product sitting in front of you, you might scan the bar code or type it into a Google search, or do Google voice search, and you find out, 'Is this a competitive price? What else could I be buying?' And so, this behaviour has changed in-store shopping, leading to what you've probably heard about the term 'show rooming', of people just going to a retail store to have a look around, and then going online to buy that product. So this world is really changing rapidly, and it means that that other 92% of sales that are happening off line are starting to become impacted by mobile and digital in a way that it really wasn't before.

If you look at the way Google is trying to help customers understand mobile, they have this full value of mobile calculator, and it has one step in it, which is: how many of the people that clicked on this ad actually walked into your store? And that's a question which most retailers can honestly not answer very well, because they don't have that data, that connection to physical movement. So, Walkbase is trying to help address this. The reason we can do this, that wasn't possible in the past, is because of the smartphones. Smartphones, modern smartphones, all have WiFi built in. And WiFi has become the infrastructure for, you used to talk about the last mile, it's the last metre. So WiFi is the communication medium of choice for smartphones for the last metre. And actually, operators, they're increasingly pushing WiFi very strongly, and even subsidising the deployment, because it's helping offload data from the 3G and 4G networks.

WiFi is becoming commonplace and in our customer cases, we're seeing that 40%, 70% of the customers walking in the door of a store have phones with WiFi and switched on. A large proportion, certainly enough for a lot of very good data. So, what we do, we have some devices. You see that little box that we've placed in retail stores, that basically listens to when a WiFi radio is transmitting, and even when you're not actively using your phone, when it's switched on, every 10, to 20, to 30 seconds, it's pinging out to find the network, and that ping comes from an individual, identifiable device. At this stage the device is anonymous, it's not connected to any consumer, but you can find out when that device is there. What we do is we record those messages, and we send them to a server in the Cloud. With that we're able to build up a picture of how consumers are behaving in stores, and we can provide that on a dashboard, via an API, and actually we're working with Google on the universal analytics API to be able to connect that to a lot of other data that they have there.

So in terms of what you can understand, the various things that really weren't possible before, so a lot of retailers have foot traffic counters, a little stereoscopic camera by a door that's actually counting how many people are walking in and out. They can calculate a conversion rate. That's a basic piece of data that at least some retailers are using as a KPI. But there's lots of other information that would be useful to understand consumer behavior. The first one is a capture rate. What proportion of the people actually walking down the street end up coming into the store? Which is really important. If you change the window display, is this changing the capture rate? We can actually give a measure of this. We can talk about the transient foot traffic. What happens when you change your marketing campaign? If you run a big campaign, maybe it's a multichannel campaign, for a sale, your foot traffic increases by 400%, you get massive foot traffic, but your sales are up 20%. What's wrong? You can actually have this comparable measure.

Dwell time. So, dwell time, how long do people actually spend in your store? We have a customer we installed recently, and in the first few weeks we have data, and the marketing department is screaming, saying, ‘it's wrong', it can't be wrong. We know our customers spend about an average of 25 minutes in the store. This is a perfume, cosmetics kind of retail store. 'They spend 25 minutes in the store.'

'No, actually, they spend seven or eight minutes. So you need to rethink your in store experience to cater for that customer, because they are not spending 25 minutes in this store.'

We can also separate our repeat versus new customers. So, if we haven't seen that WiFi radio before, we can say it's a new customer that hasn't come before. So, actually, I'll flip forward to the next line. So this is a department store in Helsinki, Finland, were we tracked a large multichannel campaign that they were doing. And they were looking at bringing customers into the men's and women's fashion department on the second floor. So they have a lot of traffic on the ground floor, but not so much on the second floor. They're looking to try and drive that and especially get new customers in who they hadn't seen before. And the total blue line is the total customers during this campaign, and the red line is the the existing customers we've seen before. So as you can see, the little green one under it is the new customers. So it was very successful in actually driving new customers in the door. So you can actually get real measures for that.

The last one is behaviour inside a store. So some of our customers are looking at understanding how long do people spend in a different department? Or in the fitting rooms, or other parts of the store, and how does that affect their shopping behaviour? So, we can actually have some view of that with this kind of system. And all of this, at this stage, is anonymous, so there's no connection to personal identification, it's like total clicks on a website. So, a second example is looking at the window displays. This is actually, we did a project with the Mini brand, the automotive retailer, looking at how the change in the window display, which cars they park in the window, how does it affect the number of people actually coming in? These are things that you can actually get some data for, so you can benchmark them and make some changes that can impact the business.

So, in terms of the footprints and the big vision for Google, this is where it's going, and where we're starting to work with some select customers, not only on the anonymous analytics, but with an opt-in from the consumer, we can then start to relate, this specific consumer, they went to your website four times, and they looked at these kind of products, and then they came in twice, but didn't buy anything with their loyalty card, which is what they use, so you can connect that. But they came in twice, and you can understand the full journey of a customer.

So, for a multichannel retailer, the offline store, you've basically had the chance to market to them in all sort of different ways, digital, offline. Then you see them at the point of sale where actually they've selected something and they're paying, but you can't actually understand what happens in the set in between. So, in the online world, everyone's used to seeing the full sales final, through which clicks, what's in the basket, try and influence that at any point in the middle, and with an offline retailer, it's been really hard. We're starting to see the world where you can actually see this impact, you can let customers opt in, and even that sample, even if you start with a sample of customers who have opted in, it will give you a much better picture of how effective are all these marketing activities you're doing at getting customers to come in the store and try on your product, or look at it, and interact with it.

The second part, and probably one of the ways that we see retailers driving the opt-ins, is to do in-store promotions. So, I spoke with the head of marketing and analytics at The Gap, and they're the kind of retailer that's thinking, 'We'd like to really be able to engage with the consumer before they get to the point of sale.' Because that's when you can actually change that behaviour, you can give them an idea for something different to buy when they come in. Because we have a real time API, that if you've registered that customer, we can give them a notification, or an SMS or an email, whatever, at the time they come into the store. Not when they walking down, and they're actually going to work and they don't want to be bothered by spam, but when they've decided to come in to the store, but before they're at the point of sale.

So this is still fairly early, this is back to the future, but we're just getting to the point where there's enough consumers with technology that can use this, and there's infrastructure coming that can support this, so that's what we're working on.

I guess I have a few quick take aways, the key points. So, mobile is really changing the game. And all the stuff that Google is now talking about with mobile is very important to think about. It's real different. And every time they say it, and I've repeated, again, there's so many websites that not mobile optimised, and it still amazes me, that basic thing that you need to make sure that the consumer can get even a simple good experience on their mobile phone. Even that's not there.

WiFi has become the infrastructure of choice for the last metre. And with real measurement of foot traffic, and analytics, we can give much better ways of understanding the consumer behavior in those physical footprints, and ways of interacting with them that can offer better possibilities for giving the value they want.

So that's my quick story. I'll be around, I can't stay till the end, I have a flight unfortunately, but I'll be around until about 3:30 if anyone has any questions.

All right, well, thank you very much.

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